This watchdog blog, by journalist Norman Oder, offers analysis, commentary, and reportage about the $4.9 billion project to build the Barclays Center arena and 16 high-rise buildings at a crucial site in Brooklyn. Dubbed Atlantic Yards by developer Forest City Ratner in 2003, it was rebranded Pacific Park in 2014 after the Chinese government-owned Greenland Group bought a 70% stake in 15 towers. New York State still calls it Atlantic Yards. Contact: AtlanticYardsReport[at]hotmail.com

Wednesday, November 22, 2006

It was just a status conference, the first skirmish in a legal war, but two lines of argument emerged yesterday as lawyers in the case known as Goldstein v. Pataki, which challenges the use of eminent domain for the Atlantic Yards project, met in federal court in Downtown Brooklyn.

On the one hand, the plaintiffs (property owner Daniel Goldstein and nine others, owners and tenants, threatened with eminent domain) will be pressed to argue that the Atlantic Yards project would provide too little public use to meet the legal standard.

On the other, the defendants (Empire State Development Corporation, developer Forest City Ratner, and city and state officials including Governor George Pataki) must stretch to contend that the project was in fact considered by a legislative body, as evolving eminent domain law seems to require.

The parties were there to address two issues: a motion by the defendants to dismiss the case, and a request by the plaintiffs for discovery, the legal process under which a party to a case is compelled to provide relevant documents. But in essence they were discussing the whole case, which may break some new legal ground. (Here's the complaint.)

Was it greased?

Plaintiffs’ attorney Matthew Brinckerhoff (right) explained to U.S. District Judge Nicholas Garaufis that the case was brought primarily under the public use clause of the Fifth Amendment, turning on the question of the motive of government officials in approving the case.

“We pleaded a whole host of facts, most of which are circumstantial,” he said, noting that that was not unusual in such cases. He said that, shortly after Forest City Ratner CEO Bruce Ratner and his company conceived of the project, they “very quickly obtained” the consent of city officials to bypass the city’s Uniform Land Use Review Procedure (ULURP) and get the state to override city zoning for an oversized project.

Brinckerhoff also pointed to reports that, shortly after the December 2003 project announcement, the Metropolitan Transportation Authority (MTA) had agreed to convey development rights to FCR. The MTA, he said, wound up issuing a Request for Proposals (RFP) in 2005, giving respondents about 40 days. One other developer, Extell, did offer three times more cash ($150 million) than did FCR, but the MTA board, controlled by appointees of Gov. George Pataki, “decided to select” FCR.

A Kelo violation?

To Brinckerhoff, the fact pattern points to questions raised in the U.S. Supreme Court’s 2005 Kelo v. New London decision on eminent domain. “Why did the five members in the majority feel comfortable that this taking was not intended to convey a private benefit?” he asked rhetorically.

Because there were safeguards, he said, and such safeguards cited in Kelo are absent in the Brooklyn case: a legislative process that began before the beneficiary was known; extensive review by a legislative body; and a bidding process to select a developer that came later rather than sooner.

“Here of course the developer has driven the process,” he said. “So there’s very strong circumstantial evidence that this taking is what the Supreme Court found not to exist in Kelo.” He acknowledged that claims always could be made that a project would increase the tax base and create jobs. Even though a project could benefit the public, he said, the “purpose” and “intent” must be discerned.

Garaufis (right) asked why the plaintiffs were in a hurry. Brinckerhoff said that the ESDC soon would confirm findings under the state Eminent Domain Procedure Law and that the plaintiffs must obtain new evidence via discovery to make their claims. If there’s going to be discovery, he added, “I would imagine” that the defendants would want it to proceed quickly so the case could be expeditiously resolved.

“You don’t feel outnumbered?” the judge asked, acknowledging the reality of the courtroom: four lawyers backing the plaintiffs sat at one table, and about ten representing the defendants sat at another.

Brinckerhoff responded that he didn't mind.

Limits on the court?

Douglas Kraus (right), representing the ESDC, started off by saying that Brinckerhoff had not addressed the 12/5/05 Brody v. Village of Port Chesterdecision by the U.S. Court of Appeals for the Second Circuit. His point: the court has little discretion to evaluate the legitimacy of the Atlantic Yards project.

He quoted Brody, which states, in part, “While a legislature may juggle many policy considerations in deciding whether to condemn private property, judicial review of the final legislative decision to exercise the power of eminent domain focuses exclusively on whether or not the taking is for a public use…. The combination of those factors – the narrow scope of issues and the broad deference to the legislature – suggests that the role of the courts in enforcing the constitutional limitations on eminent domain is one of patrolling the borders. That which falls within the boundaries of acceptability is not subject to review.”

Thus, Kraus continued, “the wisdom or advisability of a public project” is not subject to the court. The review process “began several months ago with a public hearing,” he said, citing the extensive record created by the ESDC.

A legislative agency?

Kraus then made a crucial linguistic switch from "legislative" to "administrative." He said, “If there’s a public use and you find that in the legislative record—the administrative record—that’s the end of the inquiry. The motive is irrelevant. Either there’s a public use or there isn’t.”

The judge demurred. “I’m not sure Brody is factually congruent” with the case at hand.

Kraus added that the defendants have a different view of Kelo, which, he noted, expanded the role of government and did not address blight, which is the crux of the ESDC's plan to exercise eminent domain. “We read that case as broadening the standard," he said.

Reading Kelo

Kraus pointed out that the plantiffs were basing their argument on a concurring opinion in Kelo by Justice Anthony Kennedy, who said he’d look askance at eminent domain if the process produced a favored developer.

“He didn’t muster a majority for his point of view,” Kraus noted.

“Neither did they,” the judge responded, referring to the other four justices who voted to uphold the use of eminent domain, and needed Kennedy's vote.

Kraus and other lawyers for the defendants also argued that the case belonged first in state court rather than federal court.

A second lawsuit

Jeffrey Braun (right), representing Forest City Ratner, said that “opponents and a lot of blogs” had indicated that another lawsuit was in the works, “by people who don’t live in the footprint,” challenging the adequacy of the state’s environmental review.

“Based on traffic?” asked the judge.

Brinckerhoff nodded.

“Have you ever been to that corner?” the judge continued, referring to the convergence of Atlantic, Flatbush, and Fourth avenues in Brooklyn.

Braun assented.

“Another disclosure: I’ve been to that corner,” Garaufis said dryly, to chuckles from the audience.

AY public use

Braun asserted that the project would have “significant public uses,” citing a sports arena, 2000-plus units of affordable housing, eight acres of open space, and “extensive mass transit improvements,” including redevelopment of the Vanderbilt Yard. He said there was “enough evidence to demolish the idea there’s not a public use.”

In essence, he said, the plaintiffs charge that public officials “pursued the public process for the principal purpose of benefiting a private developer. If that’s not what they’re saying, they’re asking the court to weigh public benefits versus private benefits…. I don’t think that’s something the court is entitled to do.”

Brinckerhoff responded: “Mr. Kraus referred repeatedly to the legislature... Another fundamental point—the ESDC is not the legislature. It’s one thing to defer to an elected body. It’s another to give deference to a public body that answers to the governor.”

What next

The parties then hashed out some procedural issues. “We’d like the opportunity to brief the discovery issue," Kraus told the judge. "There’s no such thing as modest or small discovery,” he said, suggesting that the plantiffs would want to pore through all ESDC documents and depose numerous board members.

The defendants must file a motion to dismiss the case by December 15. The plantiffs will have to respond by January 5, 2007. The defense will have a week to reply, and oral argument, if necessary, would be held approximately a week later.

The arguments regarding the scope for discovery will proceed even more quickly—with a submission by plaintiffs next week.

Disclosures

Garaufis at the start advised the parties that “I’m currently married to someone who at one time worked for Forest City Ratner.” His current wife, to whom he was not married at the time, worked for FCR “for a number of years, until 1994” and now works for York College.

He noted that Magistrate Judge Robert M. Levy will handle the preliminary activity in the case, providing a report and recommendations, so that if lawyers have any concern about his impartiality they can raise it at a later date.

Levy disclosed that he worked with Brinckerhoff’s partner Richard Emery at the New York Civil Liberties Union “maybe ten, 20 years ago” and that they encountered each other socially once or twice a year.

Garaufis added wryly that, when he was counsel to the Queens Borough President, he participated in a case opposing Emery, who won a landmark 1989 case at the U.S. Supreme Court abolishing the Board of Estimate. “He’s a fine lawyer,” Garaufis added.

1 comment:

I discuss Atlantic Yards in my book, which is why I am leaving this somewhat acerbic comment (The Eminent Domain Revolt, New York: Algora Publishing, 2006).

I. THE HEARING

This skirmish shows how little prepared lawyers are to deal with government purpose as a question of fact for the trier of fact. Time and time again in these comments, it is obvious that these lawyers do not know that if a reasonable juror could find no public purpose on the basis of the alleged facts, the complaint cannot be dismissed. Why does there need to be so much discussion of this point? Also, it is obvious that they cannot distinguish between an ALLEGATION by government of a government purpose, and a government purpose in FACT.

This shows how deformed the bar has been by minimum scrutiny, which is supposedly what they are arguing about. That is, the eminent domain use can go forward if there is a rational relation to a legitimate government purpose. Government purpose is a question of fact for the trier of fact.

But lawyers, litigants and judges have been so oppressed for so long, that the idea that government purpose is a question of fact, simply blows their minds. Can you believe how inept BOTH sides are when it comes to arguing this? The idea that the complaint could be denied is utterly ridiculous, and if this fumbling judge is dumb enough to dismiss it, guess what?

These lawyers are so out of touch (so, by the way, is the judge), that there is some discussion as to whether Justice Kennedy's remarks are the majority, when all he is doing is explicating (without in any way expanding), what any intelligent lawyer would do in discovery, on the basis of the idea that government purpose is a question of fact for the trier of fact.

And isn't it ludicrous that everyone, the judge included, seem to believe that Kelo expanded the range of eminent domain, when Justice Stevens himself (the mendacious rascal who wrote the majority opinion, conniving with Ruth Ginsburg to bring off the gambit) said that there is NO LOGICAL CONTENT to the notion of economic development as an eminent domain use. I mean, doesn't anyone in the Atlantic Yards case (including the judge) actually READ the case they all cite? But let's move on past these bozos.

The dismissal will be overturned on appeal, just as the MTOTSA case in New Jersey, has, in effect, just been. That case just produced a stay in the eminent domain proceedings pending appeal.

And by the way, why haven't the clumsy Atlantic Yards plaintiff attorneys asked for a stay? What is their problem? Come on guys, start THINKING. I know it's hard--but try! You might even get to ENJOY it.

They are going to have even bigger problems when they win, which, much to their astonishment, they will. I assume they filed this complaint because they read my comment in nolandgrab a few months ago saying that they should sue on the basis of no government purpose. Otherwise it never would have occurred to them.

II. THE RELIEF

So let's move on. Speaking of equitable relief, when the Atlantic Yards plaintiffs win, the issue will be, what relief? And there, the Court will ask them to SUPPLY the government purpose which was wanting in the case.

So you have to ask yourself, what, in fact, is government purpose? This will blow the attorneys' minds even more, because, before I got involved in this little issue, no one had the SLIGHTEST idea how to answer that question.

Here is the answer:

You can only shape the relief once you answer that question. Both Euclid v. Ambler, which is a pre-scrutiny regime case (1926), and West Coast Hotel v. Parrish (1937), which established the scrutiny regime, make it clear that government purpose is the maintenance of important facts. It is undisputed, in Atlantic Yards, that housing is an important fact. So you don't have to worry about that. But what does it mean to maintain housing? The two cases also make it clear that important facts are maintained by sustaining the community. And what, in fact, is the community? It is the interrelation of important facts.

So let's get over rational, relation and purpose, and start using the new terms you will need: maintenance, community and interrelation. For both Euclid and West Coast, maintenance and community are the dominant concepts, as you will see if you read them. These somewhat clueless lawyers will have to go back and read those cases again--this time carefully, unlike when they were in law school.

How do we interrelate important facts? A good example is at hand: the Abbott v. Burke New Jersey cases, in which the Court elevated education--as laid out in the New Jersey Constitution's education right--to a very high level. How high? Well, that is the trouble with Abbott v. Burke, and the reason it is still in litigation after thirty years.

BOTH the litigants AND the Court, in Abbott, STILL believe that government purpose involves discretion in government with respect to education. However, that is an error. Government purpose has NO relation to government discretion. Oooh! I can sense the heart attacks lawyers on both sides of the Atlantic Yards case will have once they read that remark. Interrelation of important facts is purely objective.

These naive lawyers are going to be dragged much further into this case than you would ever imageine. It was hoped, after the reaction to Kelo, that eminent domain cases would be "clean," that litigants would simply stop eminent domain and then go back to their lives.

Norwood v. Horney--the Ohio case in which the Supreme Court recently invalidated an eminent domain use AFTER most of the subject property had been destroyed--shows that attorneys and litigants cannot simply walk away. They are required to supply the relief criteria, which means they must interrelate ALL the facts (including government's pretextual, sham purpose) in order to maintain the facts at issue. What happens is that winning an eminent domain case exposes all the ways in which government interacts with facts in the use of eminent domain. The more you learn, the more you have to address in the relief. For example, is a 501(c)(3) entity used? Well, that has to have a government purpose. So you have to turn that into a maintenance agency. Are tax exempt bonds used? Well, under the Code, those bonds must have a government purpose as well. That money has to be redirected to maintenance. What about tax increment financing (TIF)? Well, TIF must have a government purpose as well. The tax system must be restructured to maintain.

So, you will find yourself simply rewriting government policy AND monitoring it. That is what has happened with Abbott. For example, you will want a permanent injunction FORBIDDING government from doing all the things which, you demonstrated, substituted private for government purpose. You will want constant disclosure to your client whenever government participates in similar acts relating to your clients' property. Your victory means that government will be PRESUMED to have no government purpose in relation to your clients' property. So permanent vigilance is a necessary part of the relief.

Also, you will want remedies for the full range of injuries: the 1983 violations, the economic injury sustained by the unconstitutional eminent domain cloud as just from the moment the facts show government contemplated eminent domain with respect to your clients' property. And what about property already sold under threat of eminent domain? Now it will turn out that those sales were invalid because they were under duress? Undo those sales? What rights do the "sellers" now have?

In short, the Atlantic Yards property owners will wind up supervising a lot of municipal, and even state government. Finally, what about the Federal government? Why wasn't the United States named as a defendant? Why wasn't RICO alleged?